Investing In The Movies

2015 marked a transitional year for the silver screen, as box office sales set new records and theater attendance numbers declined nationwide. The trend left some theater stocks down in the dumps, but gave a boost to some studios that have been struggling with the changing landscape of the entertainment business.

The Studios

Studios like Walt Disney Co DIS have big things ahead, despite weakness in the cable-TV market. Disney's ownership of several popular franchises like the comic book series from Marvel and George Lucas' "Star Wars" just about guarantee the studio is capable of churning out a hit.

Meanwhile, Twenty-First Century Fox Inc FOXA has a riskier lineup of films due out in the coming year, as the firm's upcoming releases are much less of a sure-thing.

Related Link: Fox And Amazon Making Biggest Financial Splashes At Sundance

The Theaters

The Competitors

Theaters Strike Back

According to RBC Capital Markets analysts Leo Kulp, theaters will be a good place to look for money-making stocks, particularly AMC Entertainment Holdings Inc AMC.

The firm's share price has fallen nearly 30 percent over the past six months, but Kulp said he sees a bright future ahead. While 2015 was a difficult year, Kulp mentioned AMC has a lot of potential for success in 2017, something markets are likely to begin focusing more on in the second quarter.

The movie industry has been shaken up by the rising popularity of in-home entertainment. Not only do subscription services like Netflix, Inc. NFLX provide viewers with extensive movie libraries that they can enjoy from their couch, but television and sound technology is evolving quickly, allowing people to watch movies in 3D without having to pay for theater tickets.

While home viewing options are improving, movie theaters are working to up the ante by providing unbeatable experiences and keeping customers interested in coming back for more. The increased number of 3D and IMAX films has helped boost consumers' interest in going to the theater rather than watching a film at home, and more comfortable seating options have also enhanced the user experience.